Mathematics for FinanceMTP Dec 23 Series IQuestion 3943 of 507
All Questions

If the difference between C.I. and S.I on a certain sum of money at 5%\displaystyle 5\% p.a. for 2\displaystyle 2 years is 1.50\displaystyle 1.50. Find the sum of money

Options

A600\displaystyle 600
B500\displaystyle 500
C400\displaystyle 400
DNone of these
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Correct Answer

✅ Option a — 600\displaystyle 600

All Options:

  • A600\displaystyle 600
  • B500\displaystyle 500
  • C400\displaystyle 400
  • DNone of these

Detailed Solution & Explanation

Let the sum of money (principal) be P\displaystyle P. The rate of interest is r=5%\displaystyle r = 5\% p.a., so i=5100=0.05\displaystyle i = \frac{5}{100} = 0.05. The time period is t=2\displaystyle t = 2 years. The formula for the difference between Compound Interest (CI\displaystyle CI) and Simple Interest (SI\displaystyle SI) for a 2\displaystyle 2-year period is: CI−SI=P×i2CI - SI = P \times i^2 Given that the difference is Rs. 1.50\displaystyle \text{Rs. }1.50: 1.50=P×(0.05)21.50 = P \times (0.05)^2 1.50=P×0.00251.50 = P \times 0.0025 Solving for P\displaystyle P: P=1.500.0025=600P = \frac{1.50}{0.0025} = 600 Thus, the sum of money is Rs. 600\displaystyle \text{Rs. }600. Hence, **Option A** is the correct answer.

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